Nasdaq Composite To Bounce Following Independence Day Break

The Nasdaq Composite has begun July with a couple of red days, down 1.45% so far in H2, after a 12.82% gain through the first half of the calendar year. That looks set to change today, with U.S. equity futures pointing to a strong open to start the week, with Nasdaq-100 contracts leading gains as technology stocks regained momentum after the long Independence Day weekend.

Nasdaq-100 futures are trading 1.2% in pre-market trading, outpacing S&P 500 futures which gained 0.4.%, while Dow Jones Industrial Average futures traded marginally lower. The Technology Select Sector SPDR ETF climbed more than 1% in early trading, signalling broad-based strength across the sector.

Western Digital shares are 5.3% higher, with Marvell Technology and Oracle also posted solid gains, adding more than 4% and 2% respectively.

The positive tone follows an underwhelming start to H2 compared to the Dow Jones Industrial Average, which itself has added 1.11%, to sit within striking distance of the psychologically significant 53,000 levelfollowing a record all time close at 52,900.07 ahead of the long weekend.

Rotation Under The Index Level

Notably, last week’s gains occurred despite a pullback in semiconductors, which have been the primary engine of market returns throughout 2026. The VanEck Semiconductor ETF shed 3.2% last week, marking its second consecutive weekly decline as markets rotated capital away from chipmakers and into other sectors. This rotation suggests investors are broadening their exposure beyond the artificial intelligence and semiconductor trade that dominated the first half of the year, while still maintaining an overall bullish stance on equities.

The ability of major indices to advance even as semiconductors retreated demonstrates improved market breadth—a development that many strategists view as healthier for the sustainability of the bull market. Rather than relying on a narrow set of mega-cap technology names, the rally has expanded to include a wider array of sectors and industries.

What To Watch This Week

Markets will turn their attention to the Federal Reserve this week, with the minutes from the June Federal Open Market Committee meeting due for release on Wednesday.

The June meeting marked the first policy decision under new Chairman Kevin Warsh, who was confirmed earlier this year. At that meeting, the Fed held its benchmark interest rate steady in the 3.50%–3.75% range in a unanimous vote, but officials signaled a more hawkish stance overall, with projections hinting at the possibility of a rate increase later in 2026.

The minutes will provide crucial insight into the committee’s thinking on inflation, which has proven more persistent than many forecasters anticipated.

With inflation running at approximately 4.2%, a three-year high, markets are closely watching for any indication that the Fed may need to tighten policy more aggressively than currently priced into futures markets. Such a development would likely weigh on high-duration growth stocks that dominate the Nasdaq, as higher discount rates reduce the present value of future earnings.

President Trump To Open The Trading Sessions

Adding to Monday’s market-friendly atmosphere, President Donald Trump is scheduled to ring the opening bells for both the New York Stock Exchange and Nasdaq from the Oval Office, rather than at the physical exchange sites. The symbolic gesture is designed to highlight the administration’s association with record stock market levels and to showcase the launch of Trump Accounts, a new government program providing children with access to equity market wealth.

The Trump Accounts initiative, created under the 2025 “One Big Beautiful Bill Act,” offers eligible children born between January 1, 2025 and late 2028 a one-time $1,000 federal seed contribution deposited into investment accounts. More than 6 million families have registered for the program, with approximately 1.4 to 1.5 million children currently eligible for the initial federal contribution. The accounts allow up to $5,000 in annual contributions per child from any adult, with funds invested in a menu of ETFs and mutual funds that compound tax-advantaged until the child turns 18.

Major financial institutions and technology companies have pledged to match the federal contribution for employees’ children or targeted demographic groups. JPMorgan, Bank of America, BNY Mellon, BlackRock, Robinhood, SoFi, and Intel are among the corporations participating in matching programs. Additionally, high-profile philanthropists including Michael and Susan Dell and Ray Dalio have pledged billions in supplementary contributions for children in lower-income ZIP codes.

The coming week will test whether the current bullish momentum can withstand closer scrutiny of Federal Reserve policy intentions. Markets have rallied on the assumption that inflation can be controlled without aggressive monetary tightening, a Goldilocks scenario that allows both economic growth and elevated valuations to coexist. If the Fed minutes challenge that assumption, the Nasdaq’s leadership could face significant pressure, particularly given stretched valuations and the recent rotation away from semiconductors. For now, though, the path of least resistance remains higher as technology stocks resume their advance and record highs beckon across the major indices.